Q:
      
      
         
            
A loan of $15 000 is taken out. If the interest rate on the loan is 7%, how much interest is due and what is the amount repaid if the loan is due in seven months
         
       
      
      
      
          
      
      
          Answer & Explanation
         Answer: A) 15612.50         
         
Explanation: We have P = 15 000, r = 0.07 and since the actual date the loan was taken out
is not given, we use t =7/12
I = Prt=$15 000* 0.07* 7/12 = $612.50
Amount repaid = Future or accumulated value,
S = P + I = $15 000 + $612.50 = $15 612.50
       
      
      
      
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